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Cherry v. Five Brothers Mortgage Company Services and Securing Inc.

United States District Court, N.D. Illinois, Eastern Division

August 25, 2019

LARRY CHERRY, Plaintiff,
v.
FIVE BROTHERS MORTGAGE COMPANY SERVICES AND SECURING, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Edmond E. Chang, United States District Judge.

         Plaintiff Larry Cherry alleges that Defendant Five Brothers Mortgage Company Services and Securing, Inc. broke into a south-side Chicago house in which he was living and then boarded it up with his possessions inside it. Cherry has now sued Five Brothers on several tort claims. Five Brothers moved to dismiss, arguing that Cherry had no standing to sue, and that each of his claims failed to adequately state a claim for relief. R. 34, Mot. Dismiss.[1] Because the motion to dismiss relied on facts outside the pleadings, the Court converted the motion to an early motion for summary judgment, limited to the issue of whether Cherry has any ownership interest in the property. R. 37, Minute Order.

         For the reasons explained below, summary judgment is granted on Count 4 (unjust enrichment), Count 6 (tortious interference with economic opportunity), and Count 7 (conversion) as it relates to the real property. Count 1 as it applies to Cherry's Fourth Amendment claim, Count 3 (negligence), and Count 5 (intentional infliction of emotional distress) are dismissed with prejudice. Count 1 as to Cherry's wrongful-eviction claim is dismissed without prejudice to Cherry re-pleading a common law wrongful-eviction claim. Finally, Count 2 (trespass) and Cherry's claim of conversion as to his personal property in Count 7 survive.

         I. Background

         For the purposes of this motion, the Court accepts as true the allegations in the Complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007). The limited exception is on the factual issue of whether Cherry owns the house at issue (the factual question on which the Court has converted this into a motion for summary judgment). For that issue, Cherry had an obligation to produce evidence. That means that allegations in his complaint will be insufficient to establish his ownership interest in the home. But even on that summary judgment issue, of course, the Court views the evidence in the light most favorable to the Cherry. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         In 2002, a homeowner named Henry Houston mortgaged his property at 102 West 117th Street in Chicago. R. 35, Def.'s Exh. A, Houston Mortgage. In January 2013, U.S. Bank National Association, Houston's mortgagee, began proceedings to foreclose on that mortgage. R. 35, Def.'s Exh. B, Foreclosure Compl. U.S. Bank succeeded in foreclosing, and in May 2015 it purchased the property at a foreclosure auction. R. 35, Def.'s Exh. C, Rep. of Sale; R. 35, Def.'s Exh. D, Order Approving Sale. The Order Approving Sale was recorded at the Cook County Recorder of Deeds on October 7, 2015. Def.'s Exh. D, Order Approving Sale at 1.

         In 2017, Houston allegedly and purportedly sold the same property to Plaintiff Larry Cherry, giving Cherry an option to buy the property for $7, 000. R. 38, Pl.'s Exh. 1, Land Contract; see also R. 32, Am. Compl. ¶ 1. Cherry has not presented any evidence to suggest that he recorded the transaction with the County. Five Brothers suggests that the contract is fraudulent. R. 40, Def.'s Reply at 2 (“Henry Houston's signature on the document looks dramatically different from the signature of Henry Houston on the copy of the mortgage.”). In any case, Cherry asserts that he “paid [Houston] substantial terms of money in cash and put substantial improvements into the property believing that the contract was valid.” R. 38, Pl.'s Resp. ¶ 8. Cherry alleges that he had paid for over $20, 000 in repairs on the property, and $30, 000 “worth of improvements and services.” Am. Compl. ¶¶ 6, 27. He also alleges that he had “over $35, 000 worth of furniture, equipment, and supplies” stored in it. Id.

         Cherry came home one day to find workers from Five Brothers inside the house “installing steel doors and window covers.” Am. Compl. ¶¶ 2, 7. He called the Chicago Police Department, but after the police officers arrived and spoke with Five Brothers employees, they let Five Brothers continue working. Id. ¶¶ 8-11. According to Cherry, workers showed the officers some documents that they refused to show Cherry. Id. ¶ 9. Cherry then made a telephone call to Five Brothers, and one of its representatives told him that Five Brothers had been authorized to board up the property by U.S. Bank. Id. ¶¶ 12-13. Finally, Cherry called U.S. Bank, who allegedly told him that “the subject property was not in their inventory.” Id. ¶¶ 14-15. Five Brothers refused to show Cherry any paperwork that they had received from U.S. Bank. Id. ¶¶ 9, 16-17.

         II. Legal Standard

         A. Motion to Dismiss

         Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This short and plain statement must “give the defendant fair notice of what the … claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) cleaned up).[2] The Seventh Circuit has explained that this rule “reflects a liberal notice pleading regime, which is intended to ‘focus litigation on the merits of a claim' rather than on technicalities that might keep plaintiffs out of court.” Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)).

         “A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted.” Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). These allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678-79.

         B. Motion for Summary Judgment

         As described earlier, the Court has converted Five Brothers' motion into an early summary judgment motion on the factual issue of Cherry's ownership or legal interest in the property. Summary judgment must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In evaluating summary judgment motions, courts must “view the facts and draw reasonable inferences in the light most favorable to the” non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007) (cleaned up). The Court “may not weigh conflicting evidence or make credibility determinations, ” Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir. 2011) (cleaned up), and must consider only evidence that can “be presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). The party seeking summary judgment has the initial burden of showing that there is no genuine dispute and that they are entitled to judgment as a matter of law. Carmichael v. Vill. of Palatine, 605 F.3d 451, 460 (7th Cir. 2010); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir. 2008). If this burden is met, the adverse party must then “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256.

         III. Analysis

         A. Standing

         Five Brothers first argues that the Complaint should be dismissed because Cherry does not have standing to bring the claims. R. 35, Def.'s Br. at 2-3. Five Brothers' theory is that Cherry cannot establish an injury-in-fact because he did not own the property from which he alleges he was wrongfully evicted. Id.; see Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (setting out the elements of Article III standing, including “an injury in fact, … a causal connection between the injury and the conduct complained of, … and [a likelihood] that the injury will be redressed by a favorable decision.”) (cleaned up). As previewed above, the Court converted the motion to dismiss to summary judgment motion on the limited issue of whether Cherry had a valid ownership interest in the property. R. 37, Minute Order.

         Based on the record evidence, it is clear that there is no dispute of material fact on the ownership of the property. U.S. Bank National Association began foreclosure proceedings on Henry Houston's mortgage in January 2013. See Def.'s Exh. B, Foreclosure Compl. U.S. Bank then purchased the property at auction in 2015. See Def.'s Exh. C, Rep. of Sale; Def.'s Exh. D, Order Approving Sale at 2. Cherry, on the other hand, has a contract allegedly signed by Houston that purports to transfer him the property as of August 2017. Pl.'s Exh. 1, Land Contract. Five Brothers maintains that the contract is fraudulent. Def.'s Reply at 2 (“Henry Houston's signature on the document looks dramatically different from the signature of Henry Houston on the copy of the mortgage.”). It could be. But the Court need not decide that issue (and, on summary judgment, might not have been able to). Even if Cherry and Houston did both sign the contract, and Cherry entered into it in good faith, even he now admits that he was duped. Pl.'s Resp. at 2 (“Plaintiff Cherry appears to have been a victim of property fraud.”). Houston did not have any authority to lease or to sell the property in August 2017-he had ...


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